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U.S. Treasury markets are under pressure again—the 30-year yield has surged above 5%, peaking at 5.011% on Wednesday, its highest level since April. This spike comes amid growing investor anxiety over America’s fiscal trajectory, following Moody’s recent downgrade, stripping the U.S. of its last remaining Aaa rating.
Moody’s cited ballooning deficits and surging interest expenses, adding fuel to an already tense financial landscape.

🧮 What’s Driving Yields Higher?
🔹 Exploding federal deficits – U.S. government spending keeps expanding with no clear plan to rein it in.

🔹 Fading foreign demand – Both Japan and China, traditionally top holders of U.S. debt, have been cutting their Treasury holdings.

🔹 Trade policy uncertainty – Recent comments around a possible return to tariffs under Trump are causing new volatility in global trade expectations.
“We’re just 12 basis points away from the highest yield since July 2007,” noted Jim Bianco, head of Bianco Research. “This isn’t just a number—it’s a sign markets are rethinking their trust in U.S. fiscal management.”

📉 Ripple Effects: Markets in Risk-Off Mode
Stocks retreat – Nasdaq futures dropped roughly 2%, signaling investor aversion to risk assets.

Bitcoin briefly wobbled – The last time yields hit 5% in April, BTC fell to a local low near $75,000. This time, however, it’s holding stronger—currently hovering above $103,000 after a Sunday high of $106,000.

📊 Who Holds U.S. Debt?
Recent shifts are also reshaping the debt landscape:

🔹 The U.K. has overtaken China to become the second-largest foreign holder of U.S. Treasuries ($779.3B), just behind Japan.

🔹 Yet both countries have been cutting their exposure, highlighting the urgent need for new buyers to absorb growing U.S. debt issuance.

💬 What Comes Next?
Analysts warn that the U.S. Treasury will be forced to issue more bonds to cover fiscal shortfalls, boosting supply and pressuring yields even higher. For investors, this environment spells increased volatility, as market sentiment swiftly shifts from risk-on to risk-off.
If yields remain above 5% for the long term, the impact could ripple across all asset classes—from mortgages to equities. And as experts point out, this time, it’s not just a temporary scare.

#USDOLLAR , #USPolitics , #globaleconomy , #MarketVolatility , #worldnews

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,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“

Financial markets are bracing for the upcoming Federal Reserve’s June FOMC meeting, but hopes for a rate cut have nearly vanished. The odds of the Fed lowering rates have dropped to just 0.1%, signaling near-unanimous market belief that rates will remain unchanged.

🔹 Probability of Steady Rates? 99.9%
According to the CME FedWatch Tool, investors are overwhelmingly betting that the target range will stay between 425 and 450 basis points. This sentiment is echoed by Polymarket, where traders have drastically shifted expectations. In May, there was still a 9% chance of a cut, but that has now shrunk to almost zero.

🔹 Labor Market & Inflation Data Crush Expectations
Recent strong U.S. job data and persistently high inflation have convinced the Fed there's no reason to rush. According to the latest FOMC minutes, central bankers remain extremely cautious, while monitoring both geopolitical and fiscal developments — including Trump’s tariffs.

🔹 Trump Pushes Aggressively for Cuts
While the Fed remains on hold, calls for cuts are growing louder. Donald Trump is demanding an immediate 100-basis-point rate cut, calling it rocket fuel for the economy. In his usual style, he lashed out at Fed Chair Jerome Powell, calling him a “disaster.”
Trump also hinted that he may soon replace the Fed Chair. According to Polymarket betting odds, the leading candidate to succeed Powell is Kevin Warsh, a former member of the Fed’s Board of Governors.

Even with mounting political pressure, the market consensus is clear: a June rate cut is highly unlikely. For now, all eyes are on upcoming CPI inflation data, which could determine whether the Fed shifts its stance before summer ends — or if rate changes will be postponed until fall.

#Fed , #JeromePowell , #centralbank , #worldnews , #USDOLLAR

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Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“